August 2009 – AggBeat

During times of economic troubles, when most companies are struggling to stay afloat, air emissions rules and regulations are hitting from all sides.

Carbon Fees. The California Air Resources Board may level a statewide carbon fee on utilities, oil refineries, and other industries to pay for the California Global Warming Solutions Act, which seeks to reduce emissions in the state to 1990 levels by 2020.

According to MercuryNews.com, if the fee is approved, it would raise $51.2 million annually during the next three years to fund the bureaucracy needed to implement California’s 2006 global warming law. The total would drop to $36.2 million by the fifth year.

Industry groups say the proposal unfairly singles them out to pay for the law. “This small group is paying for the whole program,” Michaeleen Mason, director of regulatory issues at the Western States Petroleum Association, told the news agency. “It’s really not economy-wide. We need something more broad-based.”

If the carbon fee is approved, beginning in 2010, about 250 businesses in California that make, sell, or import gasoline, diesel, natural gas, and coal would be charged roughly 12 cents per ton of carbon dioxide that both they and their customers emit into the atmosphere. Cement plants would be subject to the fee because the chemical process they use to make cement produces greenhouse gases. The average cement plant would be charged about $200,000 a year. The charge would drop to 9 cents per ton of carbon dioxide in 2014.

While other industries might pass their costs along to consumers, a cement plant is unlikely to raise its prices in a competitive global market, Dorothy Rothrock, vice president of government relations at the California Manufacturers & Technology Association, told the news agency. “Every additional cost goes right against the bottom line. It’s not that there’s any wriggle room or you can absorb it. A $200,000 fee — that’s four employees.”

Unless they also produce cement, aggregates producers won’t see a huge impact from this fee. “So far, the threshold of emissions for determining who would pay the fee is high enough that most of our [aggregates] sites would not be impacted,” Gary Hambly, president of California Construction and Industrial Materials Association (CalCIMA), tells Aggregates Manager. “Utilities will need to recoup the cost, but it will be a relatively small amount on any single bill. The bigger issue is how they set and distribute the caps on emissions.”

CARB has decided to delay making a decision on the carbon fee. According to the Washington Examiner, the decision to delay came after several electricity providers expressed concerns that California might inadvertently level a charge on energy that would violate federal laws.

Cap and Trade. The “Cap and Trade” global warming bill making its way through Congress, sponsored by U.S. Representatives Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), would limit the emission of greenhouse gases said to cause global warming. The aggregates industry is not a major greenhouse gas emitter, but, according to a special legislative update from the National Stone, Sand & Gravel Association (NSSGA), this bill would drive up energy costs to businesses and consumers without commensurate reductions in carbon emissions. It would raise the price of highway fuel through a hidden tax on the carbon present in the fuel. The Congressional Budget Office estimates that this bill will raise the price of gasoline by 77 cents per gallon over the next decade.

“The federal bill will have a massive impact on fuel and utility costs,” CalCIMA’s Hambly says. “Again, most of our [aggregate] facilities will be under the level that will require direct capping of emissions, but the utilities that serve our industry will be severely impacted and will need to pass on those costs.”

Just how much those pass-on costs will be is unknown at this time, but will surely have an effect on aggregates producers whose fuel budgets can be quite large.

Proposed Rule for Air Emissions. According to the NSSGA’s eDigest & Washington Watch, the U.S. Environmental Protection Agency’s (EPA) Advanced Notice of Proposed Rulemaking for changes to the air emissions database, also known as AP-42, is making its way through the White House’s Office of Management and Budget. The database compiles all air emission factors for a variety of air pollutants from specific industry sources, including particulate matter generated during aggregate processing.

The EPA says the proposed revisions would:

Establish, for the first time, a one-hour nitrogen dioxide (NO2) standard at a level of 80 to 100 parts per billion (ppb);

Retain the current annual average NO2standard of 53 parts per billion;

Add NO2 monitoring within 50 meters of major roads in cities with at least 350,000 residents; and

Continue monitoring area-wide NO2 concentrations in cities with at least 1 million residents.

The new revisions had an expected Federal Register publication date of late July, after which time the EPA will be accepting public comments for 60 days. Two public meetings will be held this month — one in the Washington, D.C. area and one in Los Angeles.

At Aggregates Manager press time, final decisions had not been reached on these issues. Updates on these and other issues affecting the aggregates industry will be posted in Aggbeat Online, the news section of our newly updated Web site, www.aggman.com.

Cement CO2 Emmissions Are Down. The world’s leading cement companies actually slowed the rate of growth of carbon dioxide (CO2) emissions during the manufacturing process. Net emissions from cement production grew only 35 percent between 1990 and 2006, even though production climbed 53 percent during that time frame.

According to GreenBiz.com, these findings were in a report released by the World Business Council for Sustainable Development’s Cement Sustainability Initiative, which developed a CO2 accounting and reporting protocol for the industry and created the global database of energy and emissions information that enables the analysis and benchmarking of industry performance. The report, Cement Industry Energy and CO2 Performance: Getting the Numbers Right, shows the latest progress in the international effort to make cement production more environmentally friendly.